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on Post Keynesian Economics |
| By: | Stefan Ederer; Miriam Rehm |
| Abstract: | This paper develops a stock-flow consistent Post-Keynesian model in the Kalecki-Steindl tradition with endogenous wealth accumulation and distribution, which captures the key aspects of the Cambridge debate on (anti-)dual and Pasinetti equilibria. We find that a stable interior solution – that is, a Pasinetti equilibrium – is the most likely outcome, while the corner solutions of dual and anti-dual equilibria – both the euthanasia and the triumph of the rentier – are special cases of a standard Bhaduri-Marglin model. Endogenizing the profit share yields a two-dimensional dynamic system of the wealth concentration and the profit share, which is stable for a wide range of parameter values, as long as the concentration of wealth is not unrealistically low. An interior Pasinetti equilibrium thus remains the most likely outcome. However, for certain parameter combinations, the system may move onto an explosive trajectory with an ever-rising concentration of wealth and income in the hands of capitalists. Numerically illustrating the results of the analytical model shows that endogenizing the profit share leads to a more unequal wealth distribution, and a negative feedback effect between high wealth inequality, a high profit share, and growth. |
| Keywords: | Aggregate demand; autonomous spending; multiplier; profit share; wage-led demand; profit-led demand; monopoly capitalism; markup pricing; tax cuts; Michal Kalecki; Josef Steindl; economic stagnation, wealth distribution, Post-Keynesian model, aggregate demand, Pasinetti, profit rate |
| JEL: | B22 D31 D33 E12 E21 E64 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:imk:fmmpap:112-2024 |
| By: | Davis, John B. (Department of Economics Marquette University); (Department of Economics Marquette University) |
| Abstract: | This paper investigates philosophy’s engagement with one social science, economics, via the philosophy of economics. It first distinguishes mainstream philosophy of economics and heterodox/non-mainstream philosophy of economics, and then argues that the latter’s increasing recourse to analytical reasoning in philosophy to advance its critiques of mainstream economics points toward a new engagement between philosophy of economics and philosophy. To provide grounds for this argument, the paper discusses shared thinking of three key figures: philosophy’s Derek Parfit and from economics Herbert Simon and Amartya Sen. It argues their respective critiques of dominant ideas in their fields reflect a little discussed convergence in thinking between philosophy and economics through heterodox/non-mainstream philosophy of economics. This convergence is argued to reflect a shared commitment to one philosophical conception of temporal sequences, namely, the past-present-future as opposed to the before-after sequence. Philosophy’s future engagement with economics as a social science, the paper concludes, builds on the role this conception plays in both in the future. |
| Keywords: | philosophy of economics, mainstream, heterodox/non-mainstream, Parfit, Simon, Sen, temporal science |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:mrq:wpaper:2024-05 |
| By: | Robert A. Blecker |
| Abstract: | This article presents neo-Kaleckian macroeconomic models that are intended for under-graduate instruction at the introductory and intermediate levels. The neo-Kaleckian approach incorporates markup pricing, monopoly power, and income distribution into a demand-driven macro model for short-run analysis. The model is used to demonstrate the potentially stagnating effects of increased monopoly power and the more expansionary impact of tax cuts on wages compared with profits. This article also shows how a neo-Kaleckian model can be used to analyze the cases in which aggregate demand and the level of output are either ‘wage-led’ or ‘profit-led.’ For pedagogical reasons, the models are presented in a way that is parallel to how mainstream Keynesian theory is typically covered in undergraduate macro textbooks. |
| Keywords: | Aggregate demand; autonomous spending; multiplier; profit share; wage-led demand; profit-led demand; monopoly capitalism; markup pricing; tax cuts; Michal Kalecki; Josef Steindl; economic stagnation |
| JEL: | E11 E12 A22 B22 P10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:imk:fmmpap:111-2024 |
| By: | Beatriz Estulano Vieira (University of Brasilia and New School For Social Research); Jorge Thompson Araujo (University of Brasilia and World Bank) |
| Abstract: | This paper compares and contrasts Joan Robinson’s theoretical – and “mythical”, in her words – Golden Age with the real-world Golden Age of Capitalism documented in Marglin and Schor (1990). The former provided the analytical backdrop for Robinson’s (1956, 1962) economic growth model based on a two-sided relationship between profits and investment, while the latter was a post-war empirical phenomenon in developed countries characterized by high and stable growth as well as low unemployment. In the mythical Golden Age, full-employment steady-state growth results from a highly stringent set of conditions that are satisfied only accidentally: Namely, the equality over time between the natural, the warranted, and the actual rate of growth of national income. In turn, the real-world Golden Age of Capitalism was born in the context of the welfare state, a robust trade union movement, the commitment to demand management, and international leadership by the USA, within which the macroeconomic structure, the international order, the system of production, and the rules of coordination operated. The paper then argues that Joan Robinson’s economic growth model, with suitable adjustments that preserve the two-way investment-profits relationship, also offers a sound basis for the understanding of the real-world Golden Age. These adjustments are provided by Bhaduri and Marglin (1990) and Marglin and Bhaduri (1990), who allow for idle capacity in the long period and a more realistic investment function. The Bhaduri-Marglin approach provides a coherent and innovative account of real-world Golden Age, while preserving the theoretical core of the Robinsonian growth model. Therefore, this comparison exercise highlights the explanatory power of Joan Robinson’s growth model: While originally designed to show the theoretical limits of economic growth and capital accumulation in a stylized capitalist economy, it also supplied the conceptual basis for an understanding of post-war capitalism in developed countries. |
| Keywords: | Golden Age of capitalism, economic growth, capital accumulation, profit squeeze, conflict inflation |
| JEL: | B15 E62 O23 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2415 |
| By: | Jose Barrales-Ruiz (Center of Economics for Sustainable Development (CEDES), Faculty of Economics and Government, Universidad San Sebastian and Universidad Catolica de la Santısima Concepcion.); Ivan Mendieta-Muñoz (Department of Economics, University of Utah) |
| Abstract: | This paper examines the changes in the dynamic interactions between aggregate demand and income distribution in the USA. We focus on two periods that capture the relevant characteristics before and after contemporary neoliberal capitalism. We study the interactions between aggregate demand and income distribution in both periods using structural quantile vector autoregression models. This allows us to assess the informational content of the dynamic interactions at all parts of the relevant distributions, including the potential tail risks. The results show evidence of important reductions in the profit-led effect across the whole distribution of aggregate demand during neoliberalism; while profit squeeze dynamics have decreased at most parts of the distribution of income but have increased its downside risk, thus becoming more heterogeneous across the distribution of income. Notwithstanding the underlying transmission mechanisms have remained unaltered across the two periods, our results highlight that the interactions between aggregate demand and income distribution have become a more complex phenomenon to study since the mid-1980s. |
| Keywords: | Aggregate demand, income distribution, tail risks, quantile vector autoregression, neoliberalism |
| JEL: | D33 E11 E12 E32 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2414 |
| By: | Giovanni Scarano |
| Abstract: | This paper argues that the concern to determine the rate of profit, attributed by the modern surplus approach to the classics, was not the main focus in most classical authors before Ricardo and certainly did not have a central place in Marx’s analysis. According to Marx, a uniform rate of profit was only one way to determine the distribution of surplus value among the owners of capital, while the distribution of income among capitalists and workers was strictly determined by the rate of surplus value. Marx did not use his own version of the labour theory of value to determine the rate of profit and production prices, but to analyse the dynamics of economic aggregates and bring to light the inner social nature of production and distribution processes. In this context, Marx’s rate of profit was only an aggregate measure of the maximum potential growth rate. |
| Keywords: | surplus approach, classical economists, rate of profit, rate of interest, prices of production |
| JEL: | B14 B24 B51 C67 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:rtr:wpaper:0284 |
| By: | Annie L. Cot (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, REhPERE) |
| Abstract: | In France, Charles Gide had been the first economist to analyse Marx's theses in depth. Translated into French by Joseph Roy, proofread by Marx and published in the form of fascicles by the publisher Maurice Lachâtre between 1872 and 1875. Book I of Capital met with a somewhat unexpected reception. An initial review of the German version, by the philosopher Eugène de Roberty, appeared in the columns of Emilie Littré and Grégroire Wyrouboff's journal La Philosophie Positive. Two economists close to the Guillaumin publishing house, Maurice Block and Emilie de laveleye, then commented it. But beyond these early exchanges, Marx's theories were ignored in French academic debates until Charles Gide's close analytical presentation of them more than two decades later. In accordance with the reading grid he claimed in his Histoire des doctrines économiques, Gide proposed a dual reading of Capital: one in terms of "theories" and one in terms of "doctrines". Janus bifrons: on the one hand, the academic texts, which reproduce the logical rigour of Book I of Capital; on the other, the texts of a citizen involved in the ooperative movement and solidarism, close to the pre-Marxist French socialists. As Jean Starobinski puts it, this dual perspective requires us to "shift the point of application of historical attention", and to analyse these two postures as embodying what the Konstanz School calls two "horizons of expectation" articulated here not diachronically, as in Hans-Robert Jauss, but synchronically |
| Keywords: | Karl Marx; Charles Gide; Collège de France; French socialism; Horizon of expectation; Hans-Robert Jauss |
| JEL: | B10 B14 B31 A12 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:24012 |
| By: | Eduardo da Motta e Albuquerque (Cedeplar/UFMG) |
| Abstract: | This paper discusses contemporary changes in the global capitalistic dynamic and their implications for political elaboration. The challenges for this programmatic elaboration are huge, especially those related to internationalization of economies – the road for a global capitalism. The role of the periphery in these metamorphoses shows how strategic it is for the making of global capitalism, highlighting how this outcome is a global hierarchy that changes over time. This evaluation introduces a discussion on six contemporary problems, from global warming to wars, indicating how international they are. An agenda for global reforms is suggested to face those challenges.' |
| Keywords: | metamorphoses of capitalism, socialism |
| JEL: | P00 P5 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cdp:texdis:td678 |
| By: | Annie L. Cot (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, REhPERE); Muriel Dal Pont Legrand (GREDEG, Université Côte d'Azur) |
| Abstract: | The first issue of L'Europe Nouvelle was published in 1918, as a weekly journal directed by Louise Weiss (1893-1983), a French journalist with a university degree in literature, who would later become a feminist activist and a member of the European Parliament. L'Europe Nouvelle carried the urgent need for a Peace projet after World War I and the vital necessity to set up and strengthen the new League of Nations shared in many intellectual, political, and economic circles. The contributors to l'Europe Nouvelle ranged from politicians to diplomate, writers, artists and of course economists. Louise Weiss's stated aim was to train the future elites to achieve a unified Europe as the only solution to a lasting peace. To this end, she commissioned a diverse array of authors from various disciplines and negotiated an exclusive publishing agreement with John Maynard Keynes for the French edition of seven articles, between 1927 and 1929. The paper examines these contributions |
| Keywords: | John M. Keynes; Louise Weiss; debts; reparations; l'Europe Nouvelle; World War I; the Economic consequences of the Peace |
| JEL: | B1 B22 B31 B41 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:24011 |
| By: | Kunze, Astrid (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | On 9 October 2023, Claudia Goldin was announced as winner of the 2023 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It can certainly be said that many had long awaited the recognition of her research on women and inequality in labour markets. Goldin is a labour economist and economic historian who has shed new light on economic questions related to gender equality, particularly through historical data. This article summarises some of her major contributions to our understanding of the labour market behaviour of women and gender inequality. |
| Keywords: | gender; labour market; wages; employment; discrimination; equal pay for equal work; gender segregation; labour demand and supply |
| JEL: | J10 J20 J23 |
| Date: | 2024–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2024_019 |
| By: | Bernard Gazier (Centre d'Economie de la Sorbonne); Frédéric Bruggeman (Ex-expert auprès des comités d'entreprise) |
| Abstract: | This paper presents and discusses the idea that political democracy and social democracy must be coupled in order to successufully deal with the challenges of a necessarily radical ecological turning point. We face a double paradox here, because social dialogue nowadays is patchy and weakened, and because unions mainly relay the legitimate concerns of the workers, fearing the job losses and improverishment risks stemming from the ecological crisis as well as from the measures implemented to address it. However it is more than ever necessary to actively involve all the stakeholders, especially the workers. The paper argues that in order to do so, social dialogue must be enlarged and renewed. We proceed in four steps. First, we analyse the present difficulties of the political process and suggest that overcoming them implies among others to set out a new social contract, replacing the previous fordist one. Second, we examine the concrete ways through which the actors and stakes of environment are currently introduced in the social dialogue as it is practiced in Europe, and we show that such an introduction does not come up to the challenge. Third, we introduce a theoretical perspective, enlarging the picture and focussing on workers' "real freedom" and on the old and new forms of scarcities that our societies confront. Fourth and last, we go back to social dialogue and discuss the important transformations it needs in order to simultaneously foster workers' emancipation and the ecological turning point |
| Keywords: | Social dialogue; ecological transition; capabilities; "transitional labour markets" |
| JEL: | J22 J24 J50 J62 J80 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:24002r |
| By: | Bernhard Truffer (Environmental Social Science Department, Swiss Federal institute of Aquatic Science and Technology, Switzerland) |
| Abstract: | Evolutionary thinking has provided very potent explanations for regional industrial path development in the past decade. Recent commentators argued for extending the originally rather narrow focus on preexisting knowledge stocks to include institutional dimensions, system resource build up, and the agentic shaping of industrial pathways. On an epistemological level, such conceptual enlargements require the bridging of quantitative variance explanations and qualitative process explanations, which few scholars have successfully managed to do. In the present paper, I will argue that developments in the rapidly expanding field of semantic network analysis might improve rigor in qualitative process reconstructions and by this be more easily relatable to established quantitative approaches in evolutionary economic geography. Semantic networks enable the systematic reconstruction of higher order analytical constructs based on the analysis of statements and actions of actors as reported in collections of text documents. More specifically, we will introduce the socio-technical configuration analysis (STCA) method, recently developed in the scholarly field of sustainability transition studies, and show how it can inform regional path development research. An illustrative empirical case will analyze the path development dynamics in the German federal state of Baden-Württemberg, a global leader in automobile manufacturing, in the wake of the global challenge of electric cars. I conclude with wider ramifications of semantic network approaches for economic geography research and how it can be leveraged in mixed method designs. |
| Keywords: | Regional path development, semantic network analysis, socio-technical configuration analysis, evolutionary economic geography |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:aoe:wpaper:2405 |